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EU antitrust czar Margrethe Vestager opened a new front in her offensive against Silicon Valley today by launching a formal probe into U.S. e-commerce giant Amazon over its "dual role" as a marketplace and seller of products.

The investigation, which follows a string of major cases against Google, sets the stage for a new transatlantic legal battle that will stretch well into the European Commission's next five-year term, starting in November.

Announced during the closing weeks of Vestager's term at the European Commission, it also opens a new chapter of antitrust enforcement targeting internet platforms. The EU's investigators are examining whether Amazon may be using sensitive sales data gathered from retailers on its platform in order to bolster its own merchant activities — an approach that puts data at the center of competition enforcement for the first time.

"E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don't eliminate these benefits,” Vestager, whose mandate expires at the end of October, said in a statement.

“I have therefore decided to take a very close look at Amazon's business practices and its dual role as marketplace and retailer,” she added.

The next wave

The Amazon case will allow the Commission to develop new legal tools to reign in Big Tech's ability to squeeze smaller rivals.

It comes as the EU is also carrying out preliminary investigations into Apple following a complaint from music-streaming service Spotify and into Facebook's Marketplace after a complaint from a Norwegian media conglomerate.

Over the past few years, the Commission's competition department has taken high-profile decisions against platforms for favoring their own services and demoting rivals (the Google Shopping case) and for pre-installing software to cement their dominance (the Google Android and Microsoft cases).

But the Amazon case marks the first time that big data lies at the center of the probe.

“Competition professionals have been awaiting a ‘big data’ probe for years. Amazon’s insight into consumption patterns is commercially very valuable,” said Bas Braeken, a competition lawyer at Dutch firm bureau Brandeis. "Data is different from traditional corporate assets because it is continually created as a company provides another service."

Vestager — who could end up overseeing competition as part of a wider portfolio in the next Commission — started looking into the e-commerce giant in September 2018, and told POLITICO in February that she had received "a lot of data" from 1,500 retailers contacted.

People familiar with the matter said that the Commission asked Amazon to provide 700 gigabytes of data on how products are priced, the volume of third-party sales and their inventory levels.

The opening of a formal, in-depth investigation marks a step forward that could eventually lead the Commission to fine the company owned by Jeff Bezos and order it to change its business practices.

The Commission has not made use of its power to impose interim measures on Amazon, but could still decide to do so pending the investigation.

"Amazon appears to use competitively sensitive information — about marketplace sellers, their products and transactions on the marketplace,” the Commission said in its press release.

Focus on 'Buy Box'

In particular, Brussels will investigate the "standard agreements" between Amazon and the merchants it hosts, namely "whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition."

The officials will also zoom in on Amazon's "Buy Box," which prominently features certain products in response to shoppers' search queries. They will verify how Amazon selects the winners of that process and the impact of the "potential use of competitively sensitive marketplace seller information on that selection."

The Commission has not made use of its power to impose interim measures on Amazon, but could still decide to do so pending the investigation. Changing tech giants’ business models is becoming a priority for European regulators, whose fines and light-touch regulation are increasingly criticized as insufficient.

The EU probe came hours after Germany and Austria announced they had ended their investigations into Amazon after the e-commerce giant agreed to change its terms of business for sellers. Probes in Italy and Luxembourg remain ongoing.

“We have been coordinating very closely with the [German authority] and the other authorities since the beginning of the investigation. We came to the conclusion that the investigation did not overlap,” a Commission spokesperson said.

The Commission decided to keep its legal options open at the outset of this new probe, investigating both whether Amazon has abused a dominant position and whether it has entered into anti-competitive agreements, Europe’s two main antitrust procedures.

The officials already established that Amazon’s contracts allow the company to pass aggregate sales information — from at least two merchants — from its marketplace to its retail branch, people familiar with the matter said.

They added that the EU will investigate whether this practice had anti-competitive effects on the sellers.